Notice

Feedback Sought on Use of PILOTs in Commonwealth

August 20th, 2019

The Local Government Commission, in conjunction with the Pennsylvania Municipal League and the Pennsylvania State Association of Boroughs, is undertaking astudy of the current status of Payments in Lieu of Taxes (PILOTs) within the Commonwealth. There is growing concern, both within and outside of the Commonwealth, over the revenue impacts of tax-exempt and immune property on local tax bases. Generally speaking, tax-exempt properties are owned by nonprofit entities, such as churches, hospitals, and schools, while tax immune properties are owned by local, state, and federal government entities.

Many communities nationwide look to supplement lost property taxes by implementing PILOT agreements with tax-exempt or immune property owners. These voluntary agreements come in many forms: contracts for specified payments, informal requests for payments, services in lieu of taxes (SILOTs) such as a university police department extending its jurisdiction into the surrounding municipality to mitigate police protection costs, in-kind contributions, and both recurring and one-time donations, just to name a few examples. This study seeks to aggregate all forms of voluntary payment agreements between tax-exempt and immune property owners and their respective municipalities, regardless of terminology or practice.

PILOTs, in addition to increasing municipal revenue, can also work to lessen the burden on taxpayers by broadening the pool of those funding municipal services and promoting a more active relationship between government and nonprofits. The goal of our research is to be able to analyze the current status of PILOT agreements within Pennsylvania, and with other state case studies for comparison, prepare a “best practices” guide for municipalities who may be considering starting such a program. By adding one more tool for municipalities to collect revenue, this guide would work to enhance effective and efficient local government.

To accomplish this objective, we need your expertise. We greatly value your taking 15 to 20 minutes out of your busy schedule to complete the survey via Survey Monkey. Your participation will help us to identify not only trends in PILOTs across the Commonwealth, but also specified municipal tax and budgetary information. If you have any questions, please contact Danette Magee at dmagee@palegislature.us or Julia Frey at jfrey@palegislature.us.